Integrated Macroeconomic Variables and Financial Growth of the Real Estate Sector in Kenya

Q3 Economics, Econometrics and Finance

Afro-Asian Journal of Finance and Accounting Pub Date : 2023-11-13 DOI:10.53819/81018102t4232

Jackline Wanjiku Kimemia

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Abstract

The real estate sector has been growing over the years because of major infrastructural developments and high population growth in Kenya. However, the sector has been facing some challenges that have been affecting its growth. This research aimed to assess how macroeconomic factors influence Kenya’s real estate financial success. The research primarily focused on determining inflation, interest rates, exchange rates’ impact and economic growth on Kenya’s real estate sector. The study was underpinned by demand-pull inflation theory, the classical/neo classical theory for interest rates, the classical growth theory and purchasing power parity. The study employed causal research design and targeted three main Kenyan real estate developers in Kenya; Cytonn Investments, Hass Consult, and Knight Frank. In light of the small target population, a census approach was used and the research employed secondary data. As a result, secondary data from the property developers’ yearly market reports from 2016 to 2022 was gathered. Pearson’s correlation and panel data analysis methods were also employed. The findings revealed that the relationship between inflation, interest rates, exchange rates and economic growth revealed R-squared value of 0.8057, implying that the macroeconomic variables explains around 81% of the variation in financial growth within the real estate sector. The study also found that inflation had positive and significant effect on financial growth (β =0.0045187, p=.048<.05), interest rate had positive and significant effect on financial growth (β =0.044177, p=.011<.05), exchange rate had negative but insignificant effect on financial growth (β =-0.0178337, p=0.227>.05), economic growth had positive and significant effect on financial growth (β =0.0980943, p=0.007<.05). The study recommends that financial institutions, policy makers, and developers should implement measures to mitigate the adverse effects of high inflation on the real estate sector. Keywords: Inflation, Interest rates, Exchange rates, Economic growth, Macroeconomics factor.

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综合宏观经济变量与肯尼亚房地产行业的金融增长

房地产行业多年来一直在增长，因为肯尼亚的主要基础设施发展和人口高速增长。然而，该行业一直面临着一些影响其增长的挑战。这项研究旨在评估宏观经济因素如何影响肯尼亚房地产的财务成功。该研究主要集中在确定通货膨胀、利率、汇率对肯尼亚房地产行业的影响和经济增长。这项研究得到了需求拉动通胀理论、利率的古典/新古典理论、古典增长理论和购买力平价理论的支持。本研究采用因果研究设计，以肯尼亚三家主要的房地产开发商为研究对象;赛顿投资，哈斯咨询，莱坊。鉴于目标人口较少，采用了人口普查方法，研究采用了二手数据。因此，我们收集了2016年至2022年房地产开发商年度市场报告中的二手数据。采用Pearson相关分析和面板数据分析方法。研究结果显示，通货膨胀、利率、汇率和经济增长之间的关系显示r平方值为0.8057，这意味着宏观经济变量解释了房地产行业内81%左右的金融增长变化。研究还发现，通货膨胀对金融增长有正显著影响(β =0.0045187, p= 0.048 < 0.05)，利率对金融增长有正显著影响(β =0.044177, p= 0.011 < 0.05)，汇率对金融增长有负显著影响(β =-0.0178337, p=0.227& lt; 0.05)，经济增长对金融增长有正显著影响(β =0.0980943, p=0.007< 0.05)。该研究建议，金融机构、政策制定者和开发商应采取措施，减轻高通胀对房地产行业的不利影响。关键词:通货膨胀，利率，汇率，经济增长，宏观经济因素。

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来源期刊

Afro-Asian Journal of Finance and Accounting Economics, Econometrics and Finance-Finance

CiteScore

0.70

自引率

0.00%

发文量

期刊介绍： Finance and accounting are seen as essential components for the successful implementation of market-based development policies supporting economic liberalisation in the rapidly emerging economies in Africa, the Middle-East and Asia. AAJFA aims to foster greater discussion and research of the development of the finance and accounting disciplines in these regions. A major feature of the journal will be to emphasise the implications of this development and the effects on businesses, academics and professionals. Topics covered include: -Asset pricing, corporate finance, banking; market microstructure -Behavioural and experimental finance; law and finance -Emerging economies: finance, audit committees, corporate governance -Islamic finance, accounting and auditing -Equity analysis and valuation, venture capital and IPOs -National GAAP and IASs compliance, harmonisation and strategies -Financial measurement/disclosure, and the quality of information reported -Accountability and social/ethical/environmental measurement/reporting -Cultural, political, institutional impact on financial measurement/disclosure -Accounting practices for intellectual capital and other intangible assets -Provision of non-audit services and impairment to auditor independence -Audit quality and auditor skills; internal control/auditing -Management accounting, control and /use of key performance indicators -Accounting education and professional development, accounting history -Public sector and not-for-profit accounting